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How to earn a billion dollars

paulgraham.com

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Re: How to earn a billion dollars

#121

Post by weavejester »

How many businesses are there that are worth at least $1 billion and employ no-one but the founders?

When people say that it's not possible to earn a billion dollars, they're talking about the discrepancy between the wealth gained by those employed by the company versus the shareholders of the company. For example, when WhatsApp was sold to Meta for $19 billion, how many of WhatsApp's 55 employees walked away with hundreds of millions of dollars?

The fundamental problem is that it's possible for an employee to generate a hundreds of millions of value for a business, and yet be compensated for a vanishingly small fraction of that. Even if the employees agreed to a particular salary, is it ethical to pay them so little in comparison to the worth they generate, or is it exploitative?

Most, if not all billionaires, reach that status by paying people far less than the value they generate. If you want to become a billionaire, you need to find people who are willing to be paid thousands or tens of thousands of times less than they're worth. You need employees who will generate you $100 million in exchange for being given $100 thousand.

Re: How to earn a billion dollars

#122

Post by tim333 »

andai wrote: post #16
smallmancontrov wrote: post #3

In creative destruction, you can do an accounting sleight of hand by attributing credit for creation while ignoring blame for destruction even though the two are linked. This is a technology + investing forum and all of us agree that in general creative destruction processes are enormously net positive, but they frequently do kick off a toxic byproduct in the form of said destruction (e.g. Uber and displaced taxi dri…

What's the byproduct of human-level AI and robotics?

We'll have a better idea if it arrives.

Re: How to earn a billion dollars

#123

Post by ModernMech »

proofofcontempt wrote: post #71

The pursuit of everlasting growth that pg describes inevitably results in cheating. At a certain point the market reaches a saturation point and if you're capitalising on every possible opportunity to retain your high growth rate, that will include hoarding resources and circumventing consumer protections.

The hoarding resources and circumventing consumer protections is just the start of it.

Eventually it becomes rational to start buying politicians, and subsequently laws. The next obvious avenue is to then control entire government agencies like the FAA or the FCC and just write favorable laws and regulations they don't even have to circumvent.

But even that isn't the end because they're growing too fast, they actually outgrow the law, so breaking it becomes a rational, profit-driven choice. Huge fines? Regulators breathing down your neck? No worries! Just spend more money then has ever been spent in an election to their favored presidential candidate, and then they get to just shut down investigations into themselves!

But even that isn't enough -- soon it becomes a rational business-forward goal to take over the entire government; or even better become the government. First a city, then a state, then a nation. Guess what folks EVEN THAT won't be enough. Not even everything on this entire planet Earth is enough for them; they also want the Moon and Mars and the entire solar system. They will have to become God at some point for this growth to keep up, and that will still be too little for their egos to bear. Something has to give.

Re: How to earn a billion dollars

#124

Post by AdamN »

She meant impossible in that one doesn't earn a billion dollars through work alone. The only way to get there is to set up a structure that extracts a billion dollars from a market (usually by building a structure that's more efficient but also generates externalities that are not borne by the person getting the billion dollars).

pg's reading of it is so blunt and misrepresentative that I'm nervous about what kind of content he's consuming.

Re: How to earn a billion dollars

#126

Post by xgulfie »

theturtletalks wrote: post #35
smallmancontrov wrote: post #3

In creative destruction, you can do an accounting sleight of hand by attributing credit for creation while ignoring blame for destruction even though the two are linked. This is a technology + investing forum and all of us agree that in general creative destruction processes are enormously net positive, but they frequently do kick off a toxic byproduct in the form of said destruction (e.g. Uber and displaced taxi dri…

When AI melts away these rent seeking marketplaces like Uber, Doordash, Amazon, etc, they won’t go as quietly as the people they displaced.

what makes you think AI won't be the ultimate rent-seeker

Re: How to earn a billion dollars

#127

Post by tim333 »

leto_ii wrote: post #69

> Since we started it in 2005 we've funded about 6500 companies. > Starting a successful startup is the most common way to become a billionaire, so in effect I've spent the last 21 years training people to become billionaires. So far about 30 of them have, but there are many more in the pipeline. Seems to me that right off the bat he completely undermines his own point - less than .5% of the founders being funded at…

>Easy, right?

He specifically says it isn't.

Re: How to earn a billion dollars

#128

Post by haaz »

Forgeties79 wrote: post #83
atmavatar wrote: post #74

This article reads like a rather flippant dismissal of the original concern that "earning" a billion dollars cannot be done without some moral compromise. Sure, if you start off with $2 million and double it 9 times, you end up with $1 billion. Exponential growth is a powerful thing, so it comes as no surprise that maintaining a large growth rate over time very quickly grows a starting sum into a much larger pool of…

> Sure, if you start off with $2 million and double it 9 times, you end up with $1 billion. Exponential growth is a powerful thing, so it comes as no surprise that maintaining a large growth rate over time very quickly grows a starting sum into a much larger pool of money. Reminds me of this post I’ve seen making the rounds recently about a welder at SpaceX who was making $28/hr becoming a millionaire. They keep emph…

I don't think they hid the point that he was issued stock? I thought it was pretty obvious? Which is why they're talking about it now, because the value of those stocks shot up because they went public

Re: How to earn a billion dollars

#129

Post by TheTaytay »

AdamN wrote: post #124

She meant impossible in that one doesn't earn a billion dollars through work alone. The only way to get there is to set up a structure that extracts a billion dollars from a market (usually by building a structure that's more efficient but also generates externalities that are not borne by the person getting the billion dollars). pg's reading of it is so blunt and misrepresentative that I'm nervous about what kind of…

Your phrase “extract” betrays a fundamental disagreement with what Paul is saying. (Externalities does so again) It assumes a zero-sum game where the job is to shift money from one person to another. Value, and thus money/wealth can be created. Literally. You are saying, in different words, that no one can do it “honestly”. He is saying one can.

Re: How to earn a billion dollars

#130

Post by not-a-cat »

weavejester wrote: post #121

How many businesses are there that are worth at least $1 billion and employ no-one but the founders? When people say that it's not possible to earn a billion dollars, they're talking about the discrepancy between the wealth gained by those employed by the company versus the shareholders of the company. For example, when WhatsApp was sold to Meta for $19 billion, how many of WhatsApp's 55 employees walked away with hu…

This wouldn't happen if employees rejected cash-based compensation and decided to be founders themselves. Most employees trade risk for higher cash comp, and end up with less upside. This issue is mostly settled by the employment market
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